The Arabist

By Issandr El Amrani and friends.

The Egyptian ADSL black market

If you have ever looked up to the sky while walking around in a Cairo mid- or lower income neighborhood, you must have seen a net of white cables above you, coming out of a window on one side of the street, stretching to balconies and windows on the other side, some fifteen meters above street level: A business-minded resident subscribes to a 1 Mb connection, and then informally rents out connectivity to his neighbors.Â

I recently spoke to an executive of a leading ISP in Egypt, and he estimated that no less then 40% of all ADSL lines in Egypt are shared between apartments, which technically is illegal. Sometimes the number of sub-subscribers can reach up to 50 people.

Â

The problem for ISPs is that people call and complain about services who are not their customers. They thus would like to legalize this black market by being allowed to offer multi-party contracts (which would also bring legal protection to the actual subscribers who are now held accountable for whatever their neighbors are doing on the web). But the government appears to be hesitating.

I find it interesting to see how creative Egyptians are in distribution when the offer doesn't suit market conditions for whatever reason (while the government two years ago brought prices down, the market would now be big enough for prices to further decline, but the government keeps themÂ up in order to protect smaller ISP from being driven out of the market).

A similar thing happens in the mobile market, where operators in vain kept trying to introduce packages where you buy both a mobile and a line at the same time. But distributors would in most cases tear them apart and sell both separately anyways to better tune their offers to the market.

The next round is coming up, as one of the operators is about to import handsets and SIM cards that via a code system can only be used together.